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Mahesh Kumar
Investor/ Part Time Trader
Asked a question 3 months ago

Do mutual funds and SIPs get impacted due to market correction?

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Yes. These get affected as these are directly linked to the stock market. Mutual funds is not an alternative investment option, rather these are a one of the method of investing in the stock market.

Hi Mahesh,

Mutual fund and SIP's do get impacted due to market correction. However Mutual funds or SIP's invest in a fixed number of stocks. So basically it depends on the type of fund you have invested. For example - Large cap show fall less than small cap in a correction phase. 

Thank you, 


Not sure. But i think it may

Yes, it does get affected if you have INVESTED in Equity linked mutual fund.

Equity mutual funds are directly related to the market as money is invested in stocks.


If you have invested in liquid or debt funds, then there will not be much correction because market fluctuations don't affect it.

Anything related to the market gets impacts the market movements. Whether direct Equity, MFs, Debt MFs, Bonds, etc. Equity is affected by two kinds of market movements:

1) Systematic Risk - this is a macro event. Examples - are war, Covid, oil shortages, etc.

2) Unsystematic Risk - this is specific to a stock or industry. Examples - poor results posted by a company, fall in steel demand, etc.